House Ways and Means Leaders Want China Named a Special 301 Priority Country
The U.S. Trade Representative should name China a Priority Foreign Country because of alleged trade secret theft by the country, Democratic leaders of the House Ways and Means Committee said March 28. “We have known for some time that the Government of China does not do enough to enforce the intellectual property of U.S. innovators in China. But government-sponsored theft of trade secrets would put China in an entirely different category,” said Committee Ranking Member Sandy Levin, D-Mich., and Trade Subcommittee Ranking Member Charles Rangel, D-N.Y. in a letter sent to Acting USTR Demetrios Marantis. “Given the evidence of this egregious conduct, the corresponding damage to our businesses, and the fact that China is in breach of its [World Trade Organization] obligations, we urge you to consider designating China a Priority Foreign Country for Special 301 purposes.”
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A Priority Foreign Country (PFC) is one committing severe acts, policies or practices that have the greatest adverse impact on U.S. products, as determined by USTR. The agency assesses countries’ intellectual property rights practices and enforcement annually in its “Special 301” process. Its report on that process will be released April 30. When a country is named a PFC, USTR must start a Section 301 investigation, which can lead to the levy of additional duties or a World Trade Organization case.
In the letter, Levin and Rangel cite the February report by private security firm Mandiant, which linked trade secret theft at 141 companies to a Chinese government-sponsored organization. China denied the claims. Levin and Rangel praised recent actions by the Obama Administration, such as its plan to combat trade secret theft (see 13022116), but said those actions “lay the groundwork” for designating offending countries as PFCs. “It is difficult enough for our companies to compete with the endless massive subsidies and other industrial policies of the Chinese government, but add trade secret theft into the mix and it is miraculous that our companies are able to compete at all,” the letter said.